New research done by the National Association of Home Builders (NAHB) indicates that 12% of adults, down from 14% last year, say they plan to buy a house within this next year.

Rose Quint, NAHB’s assistant vice president for survey research, said, “This drop marks the third consecutive year over year decline in the share of adults thinking about buying a home (and provides) further evidence of a slow-down in the housing market, as potential buyers are held back by the lowest levels of affordability in a decade.”

To complicate matters even more, the supply of newly built homes for sale fell -1% in Q2 2019, the first annual drop in supply in six years, according to Redfin. Additionally, after seven straight years of price increases, new home prices moderated in Q2 2019 and still, sales of new homes rose less than 1% annually.

Who are these 12% of adults planning to buy a house within this next year? NAHB’s research indicates that 58% are first-time buyers. And the implications of more than half of potential buyers being first-time buyers? First–time buyers have less “wiggle room” in their wallets, according to Diana Ollick of CNBC, and first-time buyers tend to buy in the lower end of the market where prices are rising the fastest. Talk about Catch-22.

Redfin’s chief economist, Daryl Fairweather sees this picture of fewer potential buyers among a majority of first-time buyers, fewer newly built homes, moderating new home prices and very modest new home sales as… “The moderation we’re seeing in new-home prices was expected and follows right along with our observation late last year that builders were finally shifting their focus towards offering smaller, more affordable homes. While this change was a clear and long-needed response to household demand and tastes amid an affordability crisis and a softening market, it also means that builders are no focused on homes that are less profitable for them.”

CNBC’s Ollick writes that lower mortgage rates may help on the margins but “…the reason behind those lower rates, namely a growing fear of a recession in the US economy, outweighs the benefit on a consumer’s balance sheet. Buying a home is an incredibly emotional experience and potential buyers will often pull back when they have the slightest fear of losing their job or losing any income.”